Category Archives: News

New York Court Rules Fantasy Sports Illegal

On Thursday, February 6 an appeals court in the state of New York determined that daily fantasy sports contests are in fact illegal under state gambling laws. These contests, which have been in operation since 2016, were found to be in violation of the state’s constitution, threatening sports betting giants like FanDuel and DraftKings. The latest ruling also contested an earlier provision that designated daily fantasy sports as something other than “gambling’ under state law. Now, as sports betting is becoming more and more prevalent throughout the country, industry leaders are faced with the potential threat of this ruling reaching higher level courts and eliminating one of their most lucrative markets in the nation.

Development of Sports Betting in New York

The legalization of fantasy sports in the state came in 2016, when Gov. Andrew M. Cuomo signed a law that declared these games did not constitute gambling. Cuomo signed the law on the grounds that fantasy sports provided for consumer safeguards and minimum standards. Until recently, officials had felt that fantasy sports did not constitute “gambling” because they required skill, unlike other gambling activities that are left to chance. The 2016 law also regulated and taxed daily fantasy sports providers, such as FanDuel and DraftKings.

Fantasy sports traditionally require bettors to assemble a team of professional athletes from the sport of their choice, while adhering to a set of theoretical salary caps. Once these teams are assembled, bettors can earn point with their teams over a short period time or in a fantasy sports league that lasts a portion of the professional season. The ongoing challenge to designate fantasy sports as gambling under the state law comes from the idea that these games leave much of the outcome to chance, rather than skill.

The timing of the ruling may come as a shock to bettors and industry leaders alike. In 2018, the United States Supreme Court lifted the ban on traditional sports betting throughout the nation, giving states the option of developing and implementing their own laws. Now, 13 states have legalized sports betting, and companies like FanDuel, a New York-based sports betting company, have been able to capitalize on this opportunity.

Evolution of the Lawsuit

The court ruling is actually the result of a lawsuit dating back to October of 2016, shortly after Cuomo signed the law legalizing fantasy sports. Four New York residents asserted that they had been harmed by this type of sports betting. This group of people, referred to as Stop Predatory Gambling, asserted that daily fantasy sports were a form of consumer financial fraud, and that the government was using them to exploit people who were already in debt. Jennifer White, a member of this group, shared how fantasy sports contributed to the debts her mother and father owed, resulting in significant financial harm for them and their family.

The New York Supreme Court’s Appellate Division found that the law signed by Cuomo in 2016 was unconstitutional and could not be exempted from the penal code. The reason behind their ruling stood in contrast to supporters’ initial reasons for legalizing fantasy sports; the appellate court stated that while fantasy sports do require some level of skill, they also involve a great deal of chance. For example, player injuries, bad weather, or other factors could greatly influence the outcome of each game. The amount of chance involved in each competition, the court felt, was too great to exempt fantasy sports from falling under the category of gambling.

Since the court is proposing that fantasy sports be classified as gambling under state law, the legalization of daily fantasy sports would require both a constitutional amendment and voter approval. This amendment and voter approval would be necessary if the higher courts agreed with the ruling of the appellate court.

Future Outlook of New York Sports Betting

As it stands, there is no guarantee that the case will reach the state’s highest court, the Court of Appeals. The lower level court’s ruling does not immediately affect the operation of fantasy sports, so customers will still be able to play until the case advances. Both DraftKings and FanDuel issued statements that suggested they were not fearful of any significant action in the near future, and they expect to continue business as usual until further notice.

While the immediate future of fantasy sports seems to be secure, the lawsuit definitely puts a bit of uncertainty into the state’s gambling landscape. New York is one of the largest daily fantasy sports markets in the country, and the threat of a lawsuit such as this one cannot be ignored.

Penn National Gaming Strikes Deal with Barstool Sports

Penn National Gaming, an operator of casinos and racetracks based in Pennsylvania, announced last week that they had acquired a 36 percent interest in Barstool Sports, a leading digital sports media company. The acquisition cost Penn National Gaming approximately $163 million in cash and convertible preferred stock, and the deal places Barstool Sports at a $450 million valuation. The deal has peaked interest throughout the gaming industry, and Penn National Gaming stock has already seen an unprecedented rise. The partnership between the two companies has implications for the gaming and sports industries, as the groups plan to collaborate in an effort to offer attractive sports betting options.

What Their Investment Gets Them

The $163 million investment in 36 percent stake in Barstool has already been labeled a bargain, considering the potential return on investment. President and Chief Executive Officer of Penn National, Jay Snowden, believes that the new partnership will help elevate the reach of the nation’s largest regional gaming operator, as they join forces with a brand who offers an entry-point for a young new demographic. In three years, Penn National can add to the deal and increase its interest in Barstool to 50 percent, with an incremental investment of $62 Million.

The Chernin Group was Barstool’s majority owner before the announcement of this new deal, with 60 percent ownership of the site. Following the deal, The Chernin Group will still hold 36 percent of the site, leaving the remaining 28 percent stake to Barstool Sports employees. The new deal is expected to be finalized in the first quarter of 2020.

Penn National Gaming’s investment ensures that they will be Barstool Sports’ exclusive gaming partner for up to 40 years. They also have the option of bringing in another partner who could acquire a portion of their shares in Barstool. During this 40-year period, Penn National has the sole right to use the Barstool Sports brand for all online and retail sports betting and iCasino products. Penn National has already expressed their interest in launching a Barstool Sportsbook; Head of Penn Interactive, Jon Kaplowitz, shared that customers should expect a sports betting app from the new partnership in the third quarter of 2020.

The Barstool Sports Brand

In the announcement from Penn National Gaming, Snowden touted Barstool sports for being a leader in digital sports content, with its distinct branding and young demographic. Led by CEO Erika Nardini and Founder Dave Portnoy, Barstool Sports has grown from a small pop culture print publication and blog in Boston into a national sports media giant, gaining a cult following in colleges and young audiences throughout the country. Barstool Sports fans, often referred to as “stoolies,” have established a tangible sense of community and helped build the notorious and sometimes infamous Barstool brand. Both Nardini and Portnoy take pride in the fact that their brand unabashedly tackles some of the most controversial pop culture and sports topics, making them, if nothing else, a brand that simply cannot be ignored.

Barstool already offers a number of sports betting podcasts and programs, and the deal with Penn National Gaming suggests that there are serious plans to build upon this existing market. In addition to their podcasts and betting guides, Barstool offers their own betting app for iOS and Android called Barstool Bets. The Penn Gaming partnership gives them an even larger platform for their sports betting options. The new relationship will be mutually beneficial, as both companies expand their audience to new demographics.

Already Paying Off

In the days following the announcement of Penn National’s investment, shares for the company jumped 14 percent. The unprecedented rise in Penn National’s stock is just the start of the lucrative partnership. Barstool Sports has nearly 66 million monthly unique visitors to their site and has generated $100 million in revenue over the past year. Penn National Gaming currently runs 41 gaming facilities, offering more than 50,000 machines, 1,300 table games, and 8,800 hotel rooms. Their new betting app with barstool will mark a new opportunity to reach into new markets throughout the country.

Florida Discussing Sports Betting Legislation

On Monday, leaders of the House and Senate confirmed that they were in talks over a potential gambling expansion that would bring organized sports betting to Florida. The bipartisan effort has led to serious conversations with the governor, in hopes of yielding a different result than previously proposed sports betting deals. The latest proposal hopes to bring in revenue from the Seminole Tribe, who has stopped making payments to the state due to a breach in their original agreement. If Florida were able to complete the steps necessary to legalize sports betting, they would become the 21st state to do so.

Context of the Deal

After Florida pari-mutuels infringed upon the Seminole’s exclusive right to operate designated-player card games, the state began losing money. The Seminole Tribe, who is best known for their Hard Rock casinos throughout the state, stopped their annual $350 million payments, which has caused Florida to look elsewhere to make up for the lost revenue. While a number of new betting options have been considered, nothing has gotten enough traction to even begin putting a dent in the missing revenue. Known for their complex and sometimes confusing gambling laws, Florida is now turning their attention to the sports betting industry, which has been growing significantly throughout the country.

Legislators hope that a new sports betting deal could restore revenue payments from the Seminole tribe to the state, while also upgrading gaming options at pari-mutuels. Rep. Mike LaRosa, who pushed to negotiate a sports betting deal in 2018, stated that the goal of the latest proposal is to iron out some of the larger issues, in hopes of finding a compromise between constituents before working on the details for new policy.

Weighing the Options

Although officials have expressed interest in bringing Seminole revenue back into the picture, it is clear that their intention is to continue allowing pari-mutuels to operate designated-player card games. Gov. Ron DeSantis also clearly stated that any new legislation would not be a broad expansion of gaming throughout the state. The state’s unwillingness to ban designated-player card games and DeSantis’ stance on gaming expansion doesn’t necessarily bode well for new legislation, but officials believe they have found a way to keep all parties happy.

In order to begin receiving revenue from the tribe again, Florida must first offer them exclusive access to something competitors, like the pari-mutuels, do not have. In this case, that ‘something’ is sports betting. By giving the Seminoles exclusive rights to sports betting at their Hard Rock locations, the state could then capitalize on some of the revenue, while also sharing some of the pot with the pari-mutuels, who could still operate their games.

Although talks are still in the very early stages, a number of other proposals have been made surrounding the possibility of online sports betting. Officials are seriously considering offering online sports betting in poker rooms at dog tracks, horse tracks, and jai-alai frontons. These locations could offer sports betting through terminals run by the Seminole Tribe. Other options could include increased hours of operation for tribal casinos, with additional games. The main focus is that the Seminoles would be the central figure in sports betting, if legislation moved forward in the state.

Long Way to Go

Any significant sports legislation is still a long way off, as officials continue to engage in preliminary discussions about possible sports betting options. The primary objective of the bipartisan effort to bring sports betting to the sunshine state is to keep the conversation going, in hopes of ruling out things that will not work and identifying the things that will. The biggest challenge that officials are facing, is the Seminole’s willingness to cooperate in the new discussions, given the fact that the state has broken their agreement in the past.

Washington State Pushing for Sports Betting

Washington is the latest state to begin a serious push for sports betting legalization in 2020, as significant constituents have added their voice in favor of legalization. This past Friday, the state’s leading card-room casino owner announced their support of both brick-and-mortar and mobile sports betting options for Washington residents. This most recent backing adds a new bill to a number of proposed bills that politicians and lawmakers will have to consider in the coming months. The support comes in a timely fashion, as the state’s legislative session began this past week and will last only 60 days. In that time, politicians must come to a conclusion over two bills that could legalize sports betting in the state of Washington before the end of the year.

Significant Support

Maverick Gaming LLC, one of the leading gaming companies in Washington, was a large reason HB-2478 and SB-6277 were introduced in the past week. The pair of bills are sponsored by Rep. Brandon Vick and Sens. Ann Rivers and Curtis King. Both bills seek to legalize sports betting through licensed card rooms, racetracks, and tribal casinos for professional and collegiate sports. Those in favor of the bills hope to make a push for them to pass and for sports betting to become available in 2020.

Maverick Gaming is a Nevada-based company that has built up an impressive collection of gaming facilities throughout the state over the past year. Maverick now owns 19 of the state’s 44 card rooms and is working to complete the purchase of five more. Eric Persson, CEO and co-founder of Maverick Gaming, believes that officials have put together a bill that can be successful, hoping to partner with Native American tribes to bring residents access to safe sports betting.

Details of the Bill

The proposed HB-2478 seeks to legalize sports betting in card rooms, racetracks, and tribal casinos who have gone through the process to properly obtain licenses. In addition to sports betting at these locations, mobile wagering would be permitted, as long as it could be tied to a tribal operator. Those interested in becoming a licensed operator must pay a licensing fee of $500,000. Under the parameters of the proposed bill, residents would be able to bet on all sports except for collegiate sports that involve teams from within the state.

The proposed bill is much like the others that have been passed throughout the United States. Since the 2018 Supreme Court’s decision to lift the ban on sports betting, 14 states have developed legislation that has been passed to bring legal sports betting in brick-and-mortar locations, as well as online platforms.

Other Potential Sports Betting Options

The latest bill proposed is by no means the first to come across the desks of Washington lawmakers. Last year, HB-1975 was introduced in hopes to bring legal sports betting to tribal gaming facilities. This bill had its fair share of reputable support as well, including Rep. Eric Pettigrew, who has become the NHL Seattle community ambassador and director of suites services. Many believe that HB-2478 is at odds with the one that was proposed with the help of Pettigrew last year.

Pettigrew’s HB-1975 pushed exclusively for tribal facilities in order to bypass some of the United States’ strictest anti-gambling laws. In order to collaborate on the newly proposed legislation, Native American tribes would have to turn their back on any progress they have made with Pettigrew’s bill over the past year. Although he expressed interest in partnering with the Native American tribes, Persson admits that any conversations with tribal groups have failed to bring about any results and have failed to be productive in any manner.

Future Collaborative Efforts

The increasing pressure to legalize sports betting suggests that legalization could come sooner rather than later, yet many are concerned that no legislation will go into effect until 2021. The short session period is attributed to the fact that it’s an election year, but it means significantly shortened period to make any decision on the proposed bills.

If there are any positives to take away from the latest developments on sports betting in the state of Washington, it is the fact that this issue is clearly gaining traction, as more and more parties voice their support. Over time, these groups will continue to collaborate in order to develop appropriate legislation that suits the residents of Washington. As it stands, lawmakers at least have an array of options to choose the best path for future sports betting within the state.

Maine Governor Vetoes Sports Betting Bill

On Friday, Governor Janet Mills announced her decision to veto a bill that would have legalized sports betting in the state of Maine. Lawmakers within the state have been working diligently to put together legislature that would allow the state to become the third in the New England region to permit sports betting. Despite their best efforts, Mills announced in a letter her decision to block the bill from passing, citing a number of concerns surrounding the proposed legislation. In response to the bill’s veto, lobbyists for the sports betting industry are focusing their efforts on appealing to lawmakers in order to override Mills’ decision.

Mills’ Praise for the Bill

Mills’ letter was issued on Friday and addressed to the legislature of the state. She began by acknowledging the Supreme Court’s 2018 decision to allows states to develop their own laws regarding sports betting. Since this decision, 14 states have chosen to create their own laws, and the sports betting industry throughout the country has blossomed. Within the New England region, Rhode Island and New Hampshire have already legalized sports betting, hoping to capitalize on what has proven to be a lucrative industry in other areas of the country.

Mills acknowledged that the proposed legislation was a “good effort,” and stated that she respects the time that law makers put in to make this legislation a reality. She went onto praise the individuals who worked on this effort in order to end illegal gambling operations that have been taking place for years. She finally stressed the importance of finding a balance between regulation and taxation, in order to maintain the interests of the state.

Mills’ Concerns Surrounding the Legislation

However, Mills reasons for vetoing the bill outweighed her support of it. Her concerns focused on the bandwagon effect that is taking place throughout the country, as more and more states dive into the emerging sports betting industry headfirst. Mills feels that many of these decisions are being made without taking proper precautions in ensuring the safety of the state and its residents. Jumping headfirst into legalization without first taking inventory of the success and failures of other states would be a costly error, Mills believes. These factors ultimately forced her to make the decision to veto the bill.

While the proposed legislation stated the legal betting age would be 21 or older, Mills believes that young people could still slip through the cracks. More importantly, she felt that advertising was often directed toward a younger audience. While regulations may be strict within the state, Mills fears that national marketing campaigns could extend their influence into Maine, reaching underage residents.

Revenue is one of the largest driving forces in the debate surrounding the legalization of sports betting. States believe that through regulation and taxation of sports betting they can benefit from the revenue produced, which is often projected to be millions of dollars. Mills, however, has cited the fact that many states, including Rhode Island, have fallen woefully short of these projections.

Future of Sports Betting in Maine

Proponents of sports betting legalization will be discouraged, as states throughout the New England region and the country continue to pass gambling expansions. New Hampshire, whose sports betting just went live at the start of the new year, has already seen 16,400 registered accounts with their partners, DraftKings. From those accounts more than $3.44 million was wagered in the first week of legal sports betting. While it is too early to say with any certainty, the legalization of sports betting in that state seems to have been a good choice.

Despite the veto, supporters of the bill should not lose hope just yet. Mills’ veto can still be overridden, but it would require approval from the Senate. The only roll call vote for the proposed legislation saw the Senate approve the bill with a vote of 19-15; in order to override Mills’, veto those 19 votes would have to become 24. If they motion to override does not get enough votes, then legislators will have to reconsider their approach to legal sports betting within the state.

New Hampshire Welcomes Sports Betting with the New Year

At the start of 2020, New Hampshire become the 14th state to legalize sports betting in the United States and the second state to legalize it in New England. On Monday, Governor Chris Sununu placed the first bet in the state to mark this momentous occasion. In front of a large crowd at a downtown sports bar, Sununu entertained suggestions for his first bet, eventually settling on a futures bet for the New England Patriots to win the Super Bowl. The 82nd governor of New Hampshire placed an $82 bet from his iPhone that offered a $1,000 payout. The crowd applauded the governor, and many residents throughout the state began registering to place their own bets. This occasion marked New Hampshire’s decision to approve a six-year contract with DraftKings, a leading online sports betting vendor, allowing anyone over the age of 18 to sign up and place a wager.

Ahead of the Curve

Since the United States Supreme Court’s decision to allow sports betting throughout the country, many states have rolled out new legislation to capitalize on the opportunity. Sports betting has already proven to be a lucrative opportunity throughout the nation, but the challenge for many states has been the ability to settle on legislation that they deem appropriate.

New Hampshire joins Rhode Island as the second state to offer sports betting in the New England region, while Massachusetts struggles to iron out issues with proposed legislation to join in on the action. Maine is also awaiting pending legislation for sports betting within the state, but in the meantime, residents will have to turn elsewhere if they are interested in placing a wager on their favorite sports team. In other areas in the northeastern United States, New York, Pennsylvania, and New Jersey have all legalized some form of sports betting. New Hampshire has set its eyes on residents of neighboring states, hoping to draw bettors from those who have yet to legalize sports betting options.

DraftKings, a Boston-based company, has exclusive rights to operate sports betting under their new contract in New Hampshire. As Massachusetts legislators flounder over the details of their sports betting laws, DraftKings hopes to open up offices in New Hampshire. In addition to the online betting that has been made available in the state, New Hampshire will also allow 10 brick-and-mortar sportsbooks. These sportsbooks could open at casinos, restaurants, or other entertainment facilities, making them popular destinations for visitors from Vermont, Massachusetts, or Maine.

Response and Projected Benefits

On Tuesday, the New Hampshire Lottery shared that more than 6,000 players had already registered, placing more than $250,000 in wagers. It was also reported that a significant number of these players were Massachusetts residents, who already have shown interest in traveling to place their wagers. The timing of the legalization is favorable, as the NFL playoffs begin this weekend, with the College Football Playoff National Championship and NCAA March Madness Tournament looming on the horizon.

Sununu is convinced that the legalization is the best decision for the state, citing the fact that revenues will help benefit education programs. New Hampshire will receive 50 percent of the revenue generated from sports betting, and officials have projected that $7 to $10 million will be generated annually to the direct benefit of educational programs. By 2023 these projections increase to $13.5 million annually.

Some concerns linger about the projected revenues, as Rhode Island fell drastically short of their $23 million projections, earning only $2.2 million in the last year. Despite these concerns, Sununu and New Hampshire officials are confident that residents of New Hampshire and bettors from neighboring states will do more than enough to help generate the expected revenues.

Governor Whitmer Signs Off on Sports Betting Legalization

Last month, the Michigan House of Representatives passed legislation for sports betting in the state, leaving it up to Governor Gretchen Whitmer to decide whether or not the bill should be finalized or vetoed. At the time, the House voted in favor of the new legislation, with a vote of 63-45, but many questions surrounding sports betting legalization still lingered. On Friday, Whitmer answered some of these questions by finalizing two bills with her signature, making Michigan the second-largest state in the Midwest to legalize sports betting, and the 20th state to do so in the nation.

Details of the new Bill

Whitmer’s decision means that both sports betting and online gaming could be available in the state within the next three months. Sports betting and internet gaming will be available to anyone resident aged 21 or older. Under the new bill, the state of Michigan can grant sports betting licenses to any business that already have a casino license. While state regulators still need to finalize requirements for offering sports betting, it is expected that brick-and-mortar locations will be available before their online counterparts. The biggest hurdle for online sports betting and gaming is finalizing a contract with an online sports betting retailer like DraftKings or FanDuel.

The recently signed legislation calls for an 8.4 percent tax on sports betting, which would be collected after winnings are paid out. On internet gaming, this tax would range between 20 and 28 percent, which is an increase from the original proposal. The taxes, which were the point of controversy when the House first proposed the bill, appear to have done enough to meet the approval of Governor Whitmer.

Questions Answered

One of the largest concerns about the bill when it was initially introduced by the House involved the tax that would be imposed. Many argued that the 8.4 percent tax with a gradual increase over time would not be enough to benefit the state. Even more concerning was the fact that the new bill could have a negative impact on the School Aid Fund, which taxes casinos to help benefit K-12 education.

After signing the bill, Whitmer was able to put some concerns at ease by touting the bill as a “real bipartisan win” for Michigan. Whitmer stated that her largest concern when considering this new legislation was the ability to protect and invest in the School Aid Fund. After examining the new bill, Whitmer felt that the new legislation does just that, and thanked Senator Curtis Hertel and Representative Rebekah Warren for their hard work and support in ensuring that students continue to benefit students throughout the state. Under the new bill, 20 to 28 percent of revenue generated from the gaming expansion will be dedicated to the School Aid Fund.

In addition to the benefit for the School Aid Fund, the new bills are expected to generate tens of millions in tax revenue. While the majority of this revenue will be benefiting students, it is expected that about $4 million of that yearly revenue will be dedicated to the First Responder Presumed Coverage Fund. This fund is dedicated to supporting firefighters and other first responders in the state, who contract cancer due to exposure from smoke and chemicals while on the job. The money would provide these first responders with the compensation they need to pay their medical bills.

Some still oppose the gambling expansion for the state, citing concerns for troubling gambling behaviors. Nonetheless, Michigan will move forward with the legalization and will hope to be ready to offer sports betting within the next three months, and many believe that the new legislation will offer safe, regulated gaming for residents who were previously forced to travel to neighboring states or playing on dangerous offshore websites.

Montana Edges Closer to Sports Betting Launch

In November, the Montana Lottery Commission unanimously signed off on sports betting regulations that are set to be finalized before the new year. Montana legalized sports betting through the Lottery in May in hopes of launching in time for residents to bet on the NFL season. Although the projected date has been pushed back to late this year or early 2020, the Montana Lottery Commission is prepared to launch their new sports wagering product, now being called Sports Bet Montana. In a press release issued by the commission, Lottery director Angela Wong expressed the hard work that has been taking place since May in order to help launch Sports Bet Montana.

How Sports Bet Montana Could Work

The proposed rules will allow for sports betting to take place anywhere Lottery tickets are sold; this includes bars, taverns, casinos, and other locations with the appropriate licenses. This, of course, means that these businesses would need to take the necessary steps to acquire these licenses before offering sports betting. Jennifer McKee, Montana Lottery communication manager, told local media that this means sports betting would be regulated closely, limiting the number of locations that offer sports betting to Montana residents. The Montana Lottery could begin accepting applications for licenses as early as the end of this year. Officials estimate that 1,400 locations throughout the state could qualify to apply for a license. The application for such a license would be a mere $50, which is a fraction of the cost of application fees in other parts of the country.

Montana’s sports betting bill differs from other states who offer physical sportsbook locations. Although physical locations will be applying for sports betting licenses, betting will be conducted primarily through the combination of kiosks and a mobile application. To bet, residents must be 18 years or older. As in a number of other states where sports betting has been legalized, residents would be allowed to bet on professional and collegiate sports. However, athletes, coaches, and professionals associated with these sports teams would be barred from sports betting. The newly proposed Sports Bet Montana would allow bettors to download an app on their phone, which will allow them to place sports wagers whenever they are within range of a betting kiosk. Residents can download the app and register their account remotely but would only be able to place their bets in the licensed locations either through the mobile app or through the kiosks themselves.

Kiosk Betting and More

As with any sports betting legalization, Montana hopes to generate revenue in order to fund a number of programs within the state. Lottery partners expect to collect six percent commission on every sports betting ticket sold, which is one percent more than they collect for a normal Lottery ticket. Early projections position potential revenues anywhere from $1.5 to $2.5 million for the state’s general fund. An additional $3 to $4 million is expected to be generated in order to benefit a school scholarship fund for science and technology education.

The wheels have been set in motion for the legalization of sports betting in the state of Montana, but there is still a number of obstacles to overcome. Under Montana law, the rules of sports betting must be approved by the public; the public must have a say in the publishing of the proposed Sports Bet Montana rules. The next step in the process would be for the rules to published in the Montana Administrative Register. If the new sports betting laws are passed, and prove to be successful, lawmakers could turn their attention to two other sports betting bills that have already been proposed for commercial and pari-mutuel sports betting.

Josh Shaw Suspended for NFL Season for Sports Betting

It seems as though sports and sports betting have been engaged in a complicated relationship since the very first sporting event was held. Over time, sports betting has brought about challenging ethical questions like “Who should be allowed to bet?” and “How will betting impact the sport?” For years, sports betting was banned in the United States, but a 2018 Supreme Court decision overturned that ban, bringing these concerns to the fore once more. Just this past week, a player in the National Football League was suspended for the remainder of the 2020 season after placing bets on games across the league. This suspension has done nothing to silence the debate about appropriate practices for sports betting and people are once again directing their attention to these ethical issues.

Details of the Incident

Josh Shaw is a defensive back for the Arizona Cardinals who has been on injured reserve with a shoulder injury since August 25. Shaw has not played a single down for his team this season, but that doesn’t give him the right to place bets on any of the games. The NFL has a strict gambling policy that prohibits athletes, coaches, officials, and other professionals employed by the league from betting on games. Although the NFL has banned its employees from betting, more than a dozen states have legalized sports betting, making it readily available to people across the country. Sources say that on Sunday, November 10 Shaw placed a three-team parlay at Caesar’s sportsbook in Las Vegas. Shaw’s bets were on the second half of three games in Week 10, including the Cardinals game against the Tampa Bay Buccaneers. Shaw’s bet lost, and Caesars contacted the NFL shortly after Shaw placed the wager. Nevada gaming regulations require sportsbooks to avoid accepting wagers by any professional athlete or coach, and Shaw listed his occupation as “professional football player” when filling out his application to open an account at Caesars. Shaw’s suspension was issued shortly after the NFL conducted an investigation to verify that he did in fact place the wager.

The League’s Response

In a statement released by the NFL, Commissioner Roger Goodell cited those timeless ethical concerns surrounding sports betting. Goodell emphasized that the success of the NFL depends on the preservation of the integrity of the game, and whenever an employee of the league bets on a game that integrity can be compromised. Players or coaches could very easily have access to information about teams and matchups that the common bettor would not be privy to. What’s more, players could even go as far to impact the outcome of the game through their own actions, or by encouraging others to act in a way that could influence an individual match.

The NFL’s investigation into Shaw’s betting revealed that Shaw did not involve any of his teammates or coaches in the bets he made. Additionally, he never used his position to help him gain inside information that would help him win the bets that he placed. Most importantly, the outcome of the games that Shaw bet on were not affected in any way by the bets that he placed. It is important to note that Shaw’s suspension is through the 2020 season but could last longer than that. He is able to appeal the suspension, but if that appeal fails, he would have to wait to petition for reinstatement on February 15, 2021.

History of Issues

Shaw is not the first player to be caught placing bets in the NFL, but the most recent incident of sports betting by a player dates back more than 20 years. In fact, only four players in the history of the league have faced suspension for betting. Despite the fact that these incidents are infrequent, they certainly raise many concerns for a league who is known to struggle with discipline issues. The NFL is often in the news for issues of domestic violence, substance abuse, and other issues. The fact that gambling has become legal in many places throughout the country means that sports betting can now be added to the list of issues for the league. These concerns continue to mount, while the league has begun to accept sponsorships from fantasy sports companies, casinos, and state lotteries for the first time. Ironically, Caesars Entertainment, who is responsible for operating the sportsbook where Shaw placed his wager, was just announced this past January as the league’s official casino partner.

Shaw has been no stranger to controversy either. During his college years he was suspended for fabricating a story about an ankle injury he picked up. He claimed to have injured his ankle rescuing a family member, but actually hurt it falling off a third-floor balcony. Shaw was drafted in 2015 by the Cincinnati Bengals, and he has since played for the Kansas City Chiefs and Tampa Bay Buccaneers before being picked up as an unrestricted free agent by the Cardinals this year. Shaw may never have the opportunity to play professional football again, given the severity of the suspension and his history, but the larger issue is that the NFL is faced with a problem that is more prominent than four total suspensions would suggest. It is possible that Shaw’s suspension could force the league to take a closer look at whether or not sports betting is widespread now that it has become more available. What’s more, it’s forced the league and the public to readdress those timeless ethical questions.

California Tribes Weigh in on Sports Betting

A coalition of Native American tribes proposed a ballot measure for the 2020 election, which could give voters the opportunity to decide whether or not sports betting should be allowed at racetracks and tribal casinos. The filing of these papers has been supported by 18 tribes throughout the state and marks the newest chapter in the ongoing push for sports betting legalization in California. This initiative has been led by the Pechanga Band of Luiseño Indians, who have stated that they believe Californians should have the option to participate in sports wagering in a regulated and safe manner. The interest of the tribes comes on the heels of another sports betting bill, which was introduced by Sen. Bill Dodd (D-Napa) this past June. The action of the tribes suggests that they want to ensure they get a piece of the action. The tribes now face the task of collecting the signatures of nearly one million registered voters in order to make next year’s ballot, but that’s not the only obstacle that stands in the way of sports betting legalization within the state.

Details of the Initiative

The coalition’s proposal would allow California’s Native American tribal casinos and racetracks to offer retail sports betting, as well as craps and roulette. Bettors must be 21 or older to place a wager and wagering on high school sports and Californian collegiate athletics would be prohibited. Any marketing or advertising directed at minors would be illegal, and consumer protections as well as anti-corruption measures would be put in place in order to guarantee the integrity of sporting events. Tax on sports betting revenue would be at 10 percent and that revenue would be directed to public safety, mental health programs, education, and regulatory costs. The ultimate goal of the proposed legalization is to help address concerns over illegal and offshore sports wagering operations, which lack the necessary safeguards to protect Californian citizens.

An important component of the proposal is that sports betting would only be offered in-person. Bettors would not have the option of betting online or through a mobile device and must travel to a casino or racetrack in order to make any wagers. This may raise a few eyebrows considering the fact that in states where sports betting has been legalized up to 80 percent of wagers are placed remotely, rather than in-person. The hope is that by offering sports betting at these established locations, officials could enforce strict regulations and ensure responsible gambling and transparency. Additionally, the tribes may fear that online and mobile sports betting could take business away from their casinos.

Conflicting Interests

The legalization of sports betting in California has been an ongoing discussion since the Supreme Court’s 2018 decision to allow states to legalize sports betting. Since California officials made their proposal this past June to legalize sports betting, conversations between constituents suggested that change could be in the very near future. The new proposal from the Native American tribes has complicated this in some ways. The supporters of the new initiative include the Ague Caliente Band of Cahuilla Indians, the Barona Band of Mission Indians, the Morongo Band of Mission Indians, and the San Manuel Band of Mission Indians; all of these tribes operate some of the most successful casinos in the state, thus giving weight to their proposal.

The proposal to offer sports betting at casinos and racetracks owned and operated by the tribes puts them at odds with the operators of California cardrooms, who have been making their own push for sports betting in the state. The two groups have struggled in the past over player-banked table games, which the tribes contest have taken away from their business and violated their exclusivity agreements for gaming. The conflicting interests of the group mirrors their ongoing debate over online poker, which could mean the prolonging of a decision over the best way to legalize sports betting within the state. The legalization of sports betting echoes these past arguments, as the Native American tribes push for legalization of sports betting through in-person retailers. Their proposal seems to directly oppose any online or mobile betting, which means sports betting could be less accessible.

Future of Sports Betting

With so many conflicting views surrounding sports betting in the state of California, it is tough to say whether or not legalization can come in a timely manner. Over a dozen states have already legalized sports betting or proposed some form of sports betting, and many are moving forward with those proposals within the next year. There is one thing the aforementioned groups agree on: sports betting should be legalized in order to prevent unlawful operations. If the tribes get their way, the proposal will give them exclusivity over legal sports betting, and all bets would have to be made in-person. The tribes believe that they can get the signatures necessary to put the proposal on the ballot for next year’s election. At that point it will be up to voters to determine whether or not in-person sports betting can contend with illegal online operations which have already established themselves as a more accessible option.